Correlation Between AmTrust Financial and Alta Global
Can any of the company-specific risk be diversified away by investing in both AmTrust Financial and Alta Global at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining AmTrust Financial and Alta Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AmTrust Financial Services and Alta Global Group, you can compare the effects of market volatilities on AmTrust Financial and Alta Global and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in AmTrust Financial with a short position of Alta Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of AmTrust Financial and Alta Global.
Diversification Opportunities for AmTrust Financial and Alta Global
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AmTrust and Alta is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding AmTrust Financial Services and Alta Global Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alta Global Group and AmTrust Financial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on AmTrust Financial Services are associated (or correlated) with Alta Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alta Global Group has no effect on the direction of AmTrust Financial i.e., AmTrust Financial and Alta Global go up and down completely randomly.
Pair Corralation between AmTrust Financial and Alta Global
Assuming the 90 days horizon AmTrust Financial Services is expected to generate 0.29 times more return on investment than Alta Global. However, AmTrust Financial Services is 3.42 times less risky than Alta Global. It trades about 0.05 of its potential returns per unit of risk. Alta Global Group is currently generating about -0.03 per unit of risk. If you would invest 1,099 in AmTrust Financial Services on August 31, 2024 and sell it today you would earn a total of 361.00 from holding AmTrust Financial Services or generate 32.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 46.11% |
| Values | Daily Returns |
AmTrust Financial Services vs. Alta Global Group
Performance |
| Timeline |
| AmTrust Financial |
| Alta Global Group |
AmTrust Financial and Alta Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AmTrust Financial and Alta Global
The main advantage of trading using opposite AmTrust Financial and Alta Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AmTrust Financial position performs unexpectedly, Alta Global can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Alta Global will offset losses from the drop in Alta Global's long position.The idea behind AmTrust Financial Services and Alta Global Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Alta Global vs. Cleantech Power Corp | Alta Global vs. Verde Clean Fuels | Alta Global vs. Sabra Healthcare REIT | Alta Global vs. Minerals Technologies |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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